tv Varney Company FOX Business February 4, 2013 9:20am-11:00am EST
he was in the backfield of the 49ers, and that was a two-point conversion. otherwise with the two points they would have needed a touchdown. imus: coming up on 18 and a half after the hour. i don't know if varney is there or not, but somebody will be there. sandra smith on the radio. speaking of beyoncé. ♪
it still has not been explained. did it affect the game? it almost did. when play resumed, the momentum shifted and the 49ers came very close to winning. did the advertisers get their money's worth? will the power company take a hit? what a way to start the week. we are all about your money and this morning plenty of news on that. the president and senator reid old want more revenue beating one way or another, more taxes. and yes, the dow is turning away from backing off from 14,000. here we go, everyone. "varney & co." is about to begin. [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ]
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>> the american people are on our side, and america people don't believe in these things. we believe the rich should contribute. stuart: relieve the rich should contribute, tax the rich. president obama pushing for more tax increases yesterday. in an interview on cbs before the super bowl he said there is no doubt that government needs new relation. he promises strong economic growth this year coming on the heels of an economic contraction in the fourth quarter along with the rise in the unemployment rate. and everybody's taxes already went up as of january 1, taxes may go up some more. from taxes to the market. the dow above 14,000 for the first time since 2007 friday afternoon. let's bring in nicole. it is not like it was going to hold at 14,000, now futures are down, how much are they down?
nicole: you can see the down arrows, 69 points pulling back awfully 14,000 mark. traders are not surprised. we have run up so much so far so fast. coupled with great political uncertainty in europe, something there and having to watch. it is not surprising to see a little bit of a pullback and a very strong dollar. stuart: thank you very much, back in a second. the ravens return to baltimore this morning beating the 49er 49ers. super bowl xlvii, that was it. jones set a record at returning a kickoff 108 yards, and listen to this, alicia keys set another record last night for the longest national anthem in super bowl history. all this and at a rally causing the lights go out in the super bowl. giving bud light extra free ad
time and gave themselves extra promos for their shows. now some opinion. i say this year's super bowl ad put me off. like this one for taco bell showing an elderly couple getting tattooed. and there was godaddy. in the next hour we will bring you the winners and losers at 10:45 this morning. president obama and harry reid wanwants more revenue, higher taxes. do we get strong growth with higher taxes? next. [ shapiro ] at legalzoom, you can take care of virtually
stuart: friday afternoon, the dow closed up 14,009. when trading gets underway this morning, we will be below the 14,000 level. we're going to back off in the early going this morning. we have the president and harry reid talking about higher taxes still to come, and a very nice rally the past couple of weeks, maybe there' there is a k from that. the market has opened. now we are down 19 points, we are below 14,000. the dow is actually still within a couple of points of the all-time record high. they're keeping a close eye on
the dow 14,000. when he has a moving out of bonds into stocks with a level of the 14 grand. gas prices affect your wallet every day and by the way that is spiking. national average up to $3.52 this monday morning. just in the past week the price of gas has bite $0.17. a look at where oil is trading right now, down in price as of this morning but late last week in $98 per barrel, that is one of the reasons why we have gas going up so much. back to nicole, we have blackberry up significantly this one. you want to tell me why? nicole: we have a busy trading floor this morning and we'll bring you over to where blackberry is, 5.1% right now. the first time when using they usnew ticker symbol. new price target of $20 up from
$12 so feeling very confident in the new devices, that is something they're talking about and a likely success. some positive comments from bernstein. stuart: like to see you walking around the floor. nicole: i can walk and talk, it is a miracle. stuart: as of now we are off 80, pushing us. let's go back to the economy. president obama and harry reid wants to tax the rich more. more revenue, they say. that means higher taxes. saying his policies will cause the economy to grow. this year. joining us from nashville. art laffer. what you say, if we raise taxes more this year, are we going to grow the economy stronger? >> we can do something, if we
broaden the tax base dramatically and lower rates, we can really get the economy growing, but i don't think that is what he is talking about. he is just talking about rubbing the base. stuart: you take money away from a certain group of people and spread it around to the others. >> i don't think we need more taxes, stuart. and by the way, the point harry reid makes, which is correct as far as the senate goes, they were elected to the senate and obama was reelected, but so was the house numbers. the house numbers were elected on their policies as well, 235 republicans, they were not elected to increase spending and push higher tax rates is and they control the house. so using this political argument
is a fault, i think. stuart: if the sequester goes into place, we have a significant cut in spending as of march 1. what happens to the economy then? >> we need to cut spending, we need to cut spending a lot. i am not sure this kind of sequester is the right way to do it, but it is the thing that passed in 2011, that is the only way it can be done, so be it. we would much rather see a compromise done in the house and the senate to avoid going into sequester. i would much rather see that. what i'm expecting it in 2014 there will be further judgment done by the electorate and the house republicans will win big time and the republicans could take the senate and it becomes a moot issue as which side will win. you have to cut spending. stuart: say we raise taxes a little bit more this year and we cut spending on march 1, what
kind of growth rate will be good for the economy? what do you say? >> i don't think the president is correct on that. strong growth of a seven, 8% growth rate and we are not going to get anything like that, this is not ronald reagan, believe me when i tell you that. this is not jack kennedy. bill clinton did a great job as well. this isn't even bill clinton. the policies they have put into place are antigrowth. stuart: are we headed into a recession? >> i don't know. the fourth quarter 2012, all we need is one more quarter down and that would be the official definition of a recession, so we are close. i think it is pretty rocky, to be honest with you, for the next year. i don't agree with the president, although i would love him to be right and we get very good growth, but i think this next year will be a very tough year.
stuart: art laffer joining us from the retirement capital of america, tennessee. is that true? no, we're all hard working people. that is all, stuart. stuart: thank you, art. the dow down 100 points, off 101. that is what happens when you threaten to raise taxes. bowling streamliner remains grounded. now you can let the finger-pointing begin according to "the seattle times." engineers blame the battery problems on the outsourced supply chain. those engineers say poor quality components are coming from subcontractors that have operated largely without oversight. so take a look at the stock this morning. right around where we were on friday. jerry brown says he has california's fiscal house in
order. it is in balance and it did get a credit rating upgrade. joining us now on the phone, state treasurer. i don't have much time but i want to get out of this, the opposing point of view is you face a massive pension debt, large and short-term debts you have to repay, and high taxes are pushing a lot of successful people out of the state. can you convince our skeptical audience that everything in california is fine? >> we would save her. there used to be operating structural deficits that were very substantial. they're being reduced to nothing and we're moving into the black. internal borrowing is being reduced, those are the economy picking up. those are the reasons for the upgrade that occurred by the s&p.
stuart: will you get all the tax revenue you plan on getting from the higher marginal tax rates. we have a lot of reports of wealthy people just moving out of the states, they can't take it anymore. there are a lot of people talking the way phil mickelson is talking. >> there is more than anecdotal evidence, officially somebody leaves, people don't put up press releases necessarily when they come to california, but that has happened to. the net result, the top 1% stake in california during the last decade -- fair share of the income pie. 20% of all of the income. that group has been doing well, they do well in california because there's a lot of business opportunity here. stuart: i'm afraid we're out of time, but we appreciate you being with us. thank you, sir.
i want to get back to facebook because it is well below $30 per share, what is wrong, nicole. it might even drop below 29. nicole: it is, 28.75 today. we know how volatile facebook has been, we know the latest report was disappointing to the wall street community. besides the fact they had so many users per day, per month growing mobile ad revenue, however it had run up, and now people are taking some profits. stuart: we shall see. thank you very much indeed. we want to hear from you. e-mail us right now. a lively conversation going on facebook. monday morning, seven early movers, what we have today? we have humana. surprise profit giving panasonic shares a modest boost.
10%, that is not bad, a big a bg boost, better-than-expected results at the insurance company brown and brown, up 5%. and downgrading the holdings on the wireless company. and wet seal unveiled some cost-cutting efforts. it is unchanged at 277. yahoo!'s biggest shareholder sold 11 million shares not hitting the market hard. simon property group posted better-than-expected profits but down just a fraction. more than $0.10, or $0.18 spike. is this supply and demand was something else going on here? next. (announcer) at scottrade, our clients trade and invest
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stuart: is a triple digit loss. we're down 108 barely holding 13.9. more bad news, gas prices are going straight up. $3.52 national average, a 17-cent per gallon spike in a week. joining us now, eric bolling. he wants to tell me why gas is spiking? >> there are a lot of reasons gas is spiking. crude prices are going up. there is clearly demand. you say not demand, but i think there is. the whole global economy is starting to get better, so i'm seeing upward pressure on that. anytime traders see good news, 14,000 on the dow. they are seeing the same thing we are seeing and that is good,
the economy will turn around. they are not necessarily making the jump between 14,000 on the dow and 17%. they're not looking at the unemployment numbers. stuart: look, those guys are rallying. what about us? >> absolutely. stuart: you know what i think, i think it is because ben bernanke will print up a storm and the dollar goes down, general trend of the dollar goes down, oil goes up. >> absolutely true, but it is a soup, that is one of the ingredients in the soup, the other is the global economy. a lot goes into that soup. stuart: why don't you tell me and our viewers how to make money. >> you showed the national average of gasoline, we will make some money to this screen right here. on the wholesale level, we'll
talk about what refiners are making for gallon and per barrel of gasoline. a gallon of gasoline trades from $3.02. got it? $40 per barrel. equals $126.84. that is on the wholesale level if you sell a barrel of gasoline. the refiner has to buy crude oil, right now trading on the wholesale level. that leaves $30.84 per barrel profit, gross profit to the refiners. one of the highest i have seen in a long time. $4 per barrel profit, $8 per barrel profit, when gasoline spiked a couple of years ago at 2007 it's got to $25 per barrel, at $30 per barrel refiners make money. find out who is producing the most barrels per day output and
you will see refiners will be putting some serious numbers to the bottom line. hess in the virgin islands. stuart: i am following this through. you are absolutely right mathematically, what is that encourage the refiners to refina whole lot more gasoline and pump up the supply of gasoline which mean the price of it would come back and off? >> another reason why the sale prices going up. a lot of refiners don't shut down at night, they don't go home, they keep losing barrels of oil. they need specific maintenance times. right now on the west coast there are fewer refineries, called turnaround or maintenance to clean out the refinery, change the seasonal blend, whatnot. when they go down, the wholesale price of gasoline continues to go up.
when the wholesale price trades $3 per gallon and a barrel is only $96, look them up, look up western refining, some independent refiners as well are just printing money. stuart: a new dimension. we will see you again soon. time for the gold reports. 9:49 eastern. barely any change, down just a couple of dollars. i was not impressed with the super bowl ads. i thought they were offputting and the players, i think, displayed supports partnership. overall, a lousy start to the game and those ads, didn't like them. elizabeth macdonald and real estate mogul will be chiming in. great, everybody made it.
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commercials. >> i thought the entire advertising campaign for the super bowl was sexually focused. i watched the game with my 19-year-old son and 10-year-old daughter and her friend, i was uncomfortable with them watching some of those commercials. stuart: i would point out the commercial we have on the screen now, the godaddy kiss. >> very inappropriate for prime time sunday night super bowl. the furthest i've ever seen. the halftime show as well particularly very much out there. beyoncé is very talented, but was almost, certainly r-rated. stuart: you and i keep on agreeing on things. >> unfortunately raunchy. i liked the spot about farmers with paul harvey as the voiceover and opera jeep commercial. i didn't like the blackout happened because you have to watch more of these
unfortunately raunchy commercials. i like oreo coming up quick, you can still dunk in the dark. stuart: that was clever. the first time i watched the super bowl and i wasn't enthused about what was on the screen. >> we are not prudes either. stuart: people say i am just old. more from you later. president obama and harry reid, yes, they are back at it again, calls for more revenue meaning higher taxes. both of those statements came as the unemployment rate rose in the economy contracted. more on that at the top of the hour. all stations come over to mission a for a final go.
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>> senator harry reid said it again, the rich have to pay their share. the president said the same thing, in code, the budget needs a balanced approach. translate that, tax the rich some more. both statements were made on sunday, right after the delivery of truly grim news on the economy. unemployment up, zero growth, and debt hitting $17 trillion. here we go again. the tax increases january 1st, everybody's paycheck, and it's not the end. the president wants more. he's promising if we double down on taxing the rich, we'll have strong growth in 20 # 13.
really? for the past four years, the president's policies have not produced strong growth. we have the exact opposite. debt in the water, high unemploymentment, massive debt. maybe investors are taking note. we are starting out this week with a doubling down on tax the rich policy and stocks down as well. ♪ here is our monday morning company. elizabeth's he's r real estate entrepreneur, democrat, tom is heerks annie coal's on the floor of the new york stock exchange. the big board, please, down this monday morning. off 85 points, well below 14,000. a little pull back from the run up last week. to the economy. both president obama and harry reid want more, quote, revenue. i'm saying that means higher taxes. the president goes so far to say his policies will cause the economy to grow in 2013.
joining us now in ed current, the author of "unintended consequences," former managing director at boehner capital -- bane capital, a name that rings a bell. suppose the president gets his way, doesn't raise tax rates, trims loopholes, enresult being he takes more money off wealthy people. what's that do to the economy? grow it or what? >> slows it down, but gradually over a long period of time. i think there's other factors in the short run the president's betting on to boost growth in the short run, but in the long run, if we assume income invested as equity that underwrites business isk, ultimately growing the economy, it slows down. the u.s. versus, say, europe, you see that effect significantly. the growth rate, the employment -- >> wait a second.
we already had a $200 billion take out from the economy with the tax increases that went in effect january 1st. security taxes higher rates on the rich? if we add more, that slows us down, but just in the long term; right? >> gradually, sure. there's other factors. if you event the interpret, there's growth rates or things like that if you come out of a recovery in the recession. could you get increased growth from that? sure. there's other factors other than taxes that weigh on the economy, but, serge, the taxes are a significant factor. i think the president is betting that other factors body the economy in the short run and justify set the reduction from increased tacks saying, see, taxes don't matter, but they will in the long run. >> don, you and i argued about this many, many times. we agree that raising tax rates on the rich is not the way to go. i think we agree on that; correct? >> absolutely. >> what the president is saying not raising tax rates anymore on
the rich, but taking more money off wealthy people by trimming deductions available to them. i'm saying that's another negative for the economy at this moment in time. do you agree? >> well, i think any increase in taxes right now is a negative to the economy. i thought the president was saying that we need more revenue. hopefully, he's talking about expanding our economy, and then though -- >> i don't think he is. >> have more money and pay more in taxes. >> you think he is? >> a combination. i think senator reid, clearly, is off base. >> do you think when the president talks about more revenues, he's saying we're going to get revenues from growth? >> no. >> i think it's a combinations, closing loopholes, and i'm hopeful he's looking at expanding the economy, which i believe he is. that's the focus, extend the economy, and the way to do that is for additional tax revenue. >> expanding the economy? we contract the if the fourth quarter last year. >> i'm in agreement with you that we start at the top in term
of tax increases and work down. ultimately, the middle class, if the policy is to raise revenue, it works its way down to the middle class, and they'll pay more, and that's when the economy's brought to its knees. it takes time. a lot, as you said -- >> well, we're on the wrong track. it is the wrong track. >> that's clearly, it's not an approach that's going to be effective. >> you're a democrat, a big supporter of president obama. what's beginning on? >> i've been in agreement since day one. higher taxes are not the solution. especially higher taxes with not significant entitlement reform and significant spending reform. with e -- we do not restructure. we go up to 75% tax rates, just strangles the economy because we keep taking money from those who are productive, and then spreading it out to the rest of the country. >> u.s. tax returns for the individuals have to be honest.
they have to list uncle sam as a dependent because that would show you what's going on. there's an entitlement machine as a pundit said in washington, d.c.. social welfare programs chew up two-thirds of the federal budget up from a third in 1960. if you want to pay for that, raise midding class taxes or cut them. >> okay. back to you, ed. what do you think is going to be the growth rate this year? >> well, it's going to be anemic. i think we'll get a little more rebound, higher than last year, but pretty much -- >> 2.5%? >> lucky to get there, i think so, yes. >> we are settling for mediocrity. >> certainly. >> we're told the recovery is proceeding along on track, everything's pretty okay. it could be better, but, you know, just sit back, enjoy this modest ride. i think that's the exact wrong way to go. don't settle for mediocrity, but you do. >> no, i don't. that's not what the president is saying, with all do respect, i disagree on tax increases, but
the president wants to see a robust economy. the challenge is the government has to help those who can't help themselves, but the entitlements are outdated. social security is outdated with from when it was created. the life peck tan sigh of americans, it's outdated. many of the reforms, it's inefficient and insufficient. we need comprehensive reform, and that's the republicans and the democrats. >> come on. >> the republicans allowed -- >> my head is exploding. >> the republicans allowed this to happen, allowed the tax increase to happen. if they held the line, it wouldn't have happened. >> any politician in america today, says i want to reform entitlements, you will be demagogued to death. >> so be it then. so be it. >> you'll blame the republicans. >> the republicans would have been blamed for any tax increase that would have occurred on the middle class. they couldn't hold the line in
this circumstance. >> sure, they could have. >> the president would never allow reform of entitlements. >> the nation requires risk. >> in the inaugural address, the president said hands off entitlements. we're not going to have it. it's an investment. don't reform it. >> he said don't reform entitlements. >> he said hands off. >> he's tough in fighting. >> the president, his role in part, is to protect it, and how we go about doing that, no one has the answers. >> we don't have all the answers, but collectively, we can solve of. how? >> growth. >> of course. >> you do that, you help everybody. >> oh, no, you don't. the last economic run didn't help everybody. there were many people left behind. >> the country can't -- we had 4% unemployment, a record high number of people actually working. >> 30% more hour of work per
working age adult than germany and france have today with our unemployment rate. that helps everybody. we pulled 20 million imgrants into our economy because -- >> doesn't help build those who are not prepared. it doesn't help those who are depressed -- >> depressed? oppressed? >> would you say that african-americans in the have had a fair shake for the last 300 years of the country's history? >> 300 years? >> no, no. well, no, do you think that, today -- >> let's talk about now. let's not go -- we get if -- >> okay, wait a second. >> sorry, sorry, sorry, we're out of time, flat out of time. we'll get back to this, by all means. hold on a second, we may bring you back here. let's talk about gas prices for a second, another oppression if you ask me. we pay more at the pump. in the past week, the price of gas spiked 17 cents.
liz, starting with you. this is another negative trt economy. forget why it's happening. this is a negative. >> it always is a negative. it always rattled the white house or any administration. for example when we saw the payroll tax cut put in effect -- not a cut, a temporary cut. it vaporized in a race by the spike higher in gas prices so any administration is leery when gas prices goes up, unraveling what they attempted to do in giving relief to americans. >> can we agree? >> very bad news. i know the administration has an expectation that gas prices are going to go down, and if they continue to go up, that's a devra devastating effect. >> dow down triple digits, well below 14,000, down 95 to be precise as of now. try this. fox con, a manufacturer behind
apple's biggest products, big changes coming in china after a rash of bad publicity over that. now, fox con is trying to raise union participation. get this, this is at the request of apple. let's start with apple stock. i'm not sure there's any impact there, apparently not. >> well, right now, apple's to the downside, and as you know, fox con is huge, over a million people working for them in taiwan, china, tech gadgetses made for apple, but also dell, nintendo and sony, and they are participating the rate in the unions because of bad publicity, and it's down to suicide. we'll continue to watch it. you don't see apple moving dramatically. >> no movement as far as that's concerned. thank you so much. i want to turn to the company. is there a downside to apple? its future cost structure, for example, if it pushes unionization in china?
is there a downside? >> yes, i think so. of course they'll have the same effect increased cost in product, the manufacturing cost. they will have difficulty controlling quality, which has been one the foundations of the success, and innovation will come, i believe, slower. >> yeah. >> bad publicity. >> that's true. apple is known for the terrific customer service, workers at apple now in retail stores go through these titled union awareness training to understand how attempts by outsiders to unionize the retail workers would effect their customer service. apple is on the radar screen at apple. >> it is. the news just keeps flowing. one more for you. listen to this, a news alert. a new report shows the earth, yes, it is getting warm e but humans may not be entirely at fault. a leaked report by a united nations group, i repeat, a united nations group, suggests
that heat from the sun plays a larger role in climate change than previously thought looking at estimates from nasa saying the sun was responsible for 25% of the warming observed over the past century. let's go to you first, liz. this is the united nations -- ignore don for a second -- the united nations is now saying this? >> well, it was buried in a report. that's the issue. you don't bury in a report the effect of the sun on the world's -- on the world. that's the problem. if you want to have an honest debate, you don't bury what science tells you. apparently, it was reportedly buried, the effect of the sun in chapter 11. you know, people argue both sides of the aisle that solar activity and temperature rose from 1980, and then solar activity stoppedded increasing. whatever the debate is. it's important, but don't bury it, have an honest debate. >> exactly right. we are told the science is in, the debate is over.
wrong. the debate should be just beginning, and it should be a full and open debate. i'm sure we're in agreement? >> absolutely, we are. transparency is good, and, also, we have to have all the facts out there, and whether it's conducive to one side or the other's argument, you know, all of us as occupants of the planet need to have the actual, correct information, and anyone who buried the report should be held accountable for it too. >> the united nations, accountable? >> well, credibility wise, we should hold them accountable to the credibility if they hide information and fail to disclose it. >> the news keeps flowing. mcdonald's offering a first new happy meal in a decade. fish mcbites widely available in u.s. restaurants this week through march, just in time, i believe, for lent. nicole, the stock is not moving on the news, but i'm sure you are interested. >> i like how you say it in a cheery manner. it's a great thing to introduce it for the happy meal. they say based on the research,
there's going to be strong demand. i have two boys, and i couldn't pay them to trade in their chicken nuggets or hamburger for mcbites. >> really? >> really. >> oh. >> oh, they are not going to have this little fish mcbite. they are not having it. i'm telling you. >> i lived in hong kong in the early 1970s, and when i was there when the first mcdonald's opened in hong kong, and day one of that restaurant opening, the fish sandwich was the biggest seller at that restaurant, and it was the biggest seller of any mcdonald's anywhere in the world from day one in hong kong. don't tell me that the fish is not going to make it. it will. >> oh, it's going to make it. just telling you not in my household. >> i'm sorry, i was listening to you, nicole, but they were in my ear. i got to tell you this one. the super bowl ratings just came in. they were thee best ever, okay?
you got the numbers for me, mike? we don't have the numbers yet. that's the breaking headline. the ratings were thee best ever. what was that? up 1% over the previous high. best ratings ever. gun violence in chicago. epidemic. we know that. dozens of shootings, murders every week. reverend jackson says he has a solution. he wants to bring the federal government in. homeland security patrolling the streets of chicago. the judge is next. i'm a conservative investor. but that doesn't mean i don't want to make money. i love making money. i try to be smart with my investments. i also try to keep my costs down. what's your plan?
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♪ >> dow jones industrial average hits 14,000 friday, first time since october 2007, but the economy's contracting, up employment up, more taxes to come, and dow down 100 points. gas prices all across the country just keep on rising. the national average for regular moving up to $3.52 a gallon. that would be a spike, a 17 cents just in the last week. with rising gas prices, oil trading at $96 today. it's down a dollar. it had reached 98 last week. good news for blackberry. they upgraded the stock, and the stock is 6% higher back to $13 a share. watching dell as it gets closer to a deal to sell itself, making it into a privatety equity firm. it's worth $24 billion.
>> here they come, another news alert, new zna evidence convinced scientists, quote, beyond a reasonable doubt, that remain found under a parking lot in england belonged to king richard the iii supposedly killed in a battle, but known from the play, richard iii, where the king is portrayed as a scheming monster who killed
children to get control of the thrown. >> in a parking lot? >> the judge is here. i hope that's the entirety of the comments. thank you very much, indeed. [laughter] here's another update. okay. this is serious, first. [laughter] serious, serious, very serious: another update on the gun debate. reverend jesse jackson is calling for homeland security to patrol the streets of chicago to deal with the soaring gun violence in the city. judge is here. i got a variety of questions about this. >> it's a profound issue. >> can you do this? can you bring in federal authorities to police a local municipality, question one. >> the only precedent for that in american history is where there are no local authorities, and the classic example is the american south during the early parts of the reconstruction period where the -- during the civil war, so much of the infrastructure, so much of the government of southern states,
local and statewide was destroyed in the war. only american troops could maintain order. >> what federal troops brought in in the deep south in the days of the civil rights move the and again in the riots of 67 #. >> yes, those are discreet examples where local police would not enforce federal civil rights laws so president eisenhower, for example, jfk, for example, nationalized the -- federalized the national guard. took them away from the jurisdiction of southern governors, and he put them under the jurisdiction of the defense department. >> now, reverend jackson is not proposing that in chicago. >> no. he's saying the department of homeland security should be a federal police department, prohibited by the constitution, prohibited by cation law, and not authorized by the statute that establishes homeland security. >> look, i know you are not inside the jackson's head. i know you are not, but why would he propose this? test praition, perhaps?
>> i think desperation. this is a slap in the face to mayor emanuel, to gary mccarthy, the police commissioner, whom i know, a very, very professional, ray kelly modern era type well-educated police commissioner. this is just not something that the feds -- that the feds do. i don't know if it has to do with the school shooting in connecticut because, as you may know, in every public high school in chicago, the police are physically present. uniform and armed. this is the only major city in the united states of america, not with standing the at tiewts of the mayor on gun control where every public high school has a police presence. what's in his mind? i don't know. i know what's not there is the constitution. >> and he -- what's wrong with the police force? obvious question, why aren't they doing this? >> i don't know enough about the local politics to know if there's a problem with chicago police. i know that murder is rampant, and one of the reasons murder is
rampant is because people can't defend themselves. >> here's the latest development. this is what you talk about. the chicago police will not respond to burglaries or assaults if the perpetrator is assumed to have gone. they won't send a patrol officer to the location. they won't do that. now, they want to put extra people online to patrol for murders, i think, that's what they are trying to do. >> well, they'll argue this is a prioritization and saving human life is better than preserving property. >> quickly, judge, is the reverend jackson trying to bring the president to the conversation, quote, when the president shows up, that shows ultimate national seriousness about gang violence, about the violence in cities like chicago? >> most respectfully, violence in chicago and in any city in the united states is not the job of the president or anybody in the federal government under the constitution. it's the state and local -- state and local governments to address. >> judge, always a pleasure.
thank you, sir. rising unemployment, a shrinking economy, but you wouldn't know it if you read the papers. the celebration of mediocrity. that's my take, and it's next. [ woman ] if you have the audacity to believe your financial advisor should focus on your long-term goals, not their short-term agenda. [ woman ] if you have the nerve to believe that cookie cutters should be for cookies, not your investment strategy. if you believe in the sheer brilliance of a simple explanation. [ male announcer ] join the nearly 7 million investors who think like you do: face time and think time make a difference. join us. [ male announcer ] at edward jones, it's how we make sense of investing.
down a metadata definition of a recession, so we are close. i think it looks pretty rocky for the next year. i don't agree with the president even in spirit although i would love for him to be right, i really hope he is right and we get good growth. stuart: yes, we would. art laffer joined us last hour. more "varney & co." weekday mornings 9:20 sharp as when we start. down 100 points with the dow backing off of 14,000 as of right now. to nicole at the exchange, what is going on with oracle? nicole: oracle has been on the downside. of over 20%, here you go, oracle down 1.1%, and you have seen the deal. we are right around arguing over little pennies.
you are seeing them running up clearly. stuart: thank you, nicole. medicare fraud rampant, it is. it costs taxpayers billions of dollars, but for criminals it is quite a profitable enterprise and this morning the man who literally wrote the book on russian mobsters, do not miss this one. you know, i did a double take on this one. the headline from "chicago tribune," not too hot, not too cold economy. what? the jobless rate has just moved up, government reported the actions contracted, yet all across media and from the white house is a very different story. here's my take on settling for mediocrity. that is exactly what we are talking to. the recovery is on track, slower than we would like but still
steady. the president putting out this line in much of the media has reaped it. if the stock market hit eucharist must be assigned everything is okay. right? wrong. ben bernanke's promise to keep printing dollars. the jobless rate went up it was a sure sign he would print more. stocks went up more. things are not okay. your 8% unemployment and zero growth is not okay. our debt will hit 17 trillion this fall, that is not okay. this is the worst recovery from a recession in three generatio generations, and to sit back and accepted as if we can't do any better is just plain wrong. the president's cheering gallery in the media wants us to settle for and accept the new normal. no jobs, no growth, big debt, just like europe. surely we are not going to go along with this, are we? i don't think we should start
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you'll also get a free informational dvd and brochure. why wait? hear today what a little lyric can do for you. get the hearing aid that can. lyric from phonak. lyric can. (announcer) scottrade knows our and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company." stuart: i want to bring in scott, who joins us frequently from chicago. scott, have to tell you i was in chicago freezing cold friday and saturday.
saturday morning i opened up the "chicago tribune" and the main headline reads "not too hot, not too cold, goldilocks economy." what are you people thinking of? >> i am increasingly more in your camp. yelling at the television in the office. they're telling me and everybody in the country things are better but look up and down the block, i don't think anybody is feeling any better. these corporations are so low, it looks like things are doing better but at the end of the day the last time we had stocks with 2007, an employment rate less than 5%. what is going on out there? stuart: the primary reason the dow rallied to 14,000, the primary reason why oil is at 97, $98 per barrel is ben bernanke is printing up a storm, that is the regio reason. what do you say? >> i would say the only reason.
i cannot tell investors not to be involved. we are not getting it. they have to fall under the market and slowly but surely it will rally for the rest of the year. the truth is in the 10-year period the rate of the week goes lower, so even lower rates and a higher stock market, which is preferred if you talk to people behind me. stuart: it is absolutely fascinating to see it unfold, isn't it? >> we lost all sense of common sense. stuart: you are right. the 10-year treasury yield has fallen below 2% as you suggested. we're listening to you, that is the truth. you move the market just like that. >> thank you. stuart: see you soon. total change of subject. according to the attorney general malaise, there is roughly 60-$90 billion worth of fraud in medicare every year.
usually profitable. but the russian mob is planning playing abig role in all this. joining us now, a professor at nyu, he is an expert on the russian mob. welcome back, good to see you again. >> good to be back. stuart: can you explain how the russian mob is involved? >> they're very good at working out how to use bureaucracies. they had 70 years back in the motherland, but these are sharp people, these are much more the new generation of cancer does this man. let's face it, when you have three quarters of a trillion dollars spent per year, that is a massive opportunity. stuart: what is the mechanism, the process? >> the set up operations in which a lot of billings go down. medical equipment never get signed off on this.
you either have a big operation, one for example back in 2010 which involved over 100 corporations, they did $160 million, run by an armenian. and at the same time we have had big operations, $57 million, but the point is it was caught running the full operation, a quarter of a billion dollars on that one operation. stuart: if you know about this, why don't the authorities know about this? >> they do. stuart: why don't they stop this? >> these are the ones that are caught. the problem is for everyone that is caught, there are clearly a lot of that aren't. stuart: couldn't you do a computer search of how much is billed to each clinic or doctor and i when it goes over a certan amount it raises a red flag and you go and investigate? it sounds simple to me.
>> these are people, if i am from the united states may be on a student visa, never been hit before, he has the money and the know-how how to set up a little organization in some small town running medicare deal. he knows he has six, eight, 12 months before they start tracking him. he racks up $4 million worth of bills. he is out of the country, the business is closed down. he is just a front, trained, bankrolled to do these jobs and once he's back, he's home free. >> we have health reform, a brand-new entitlement system. the 2010 armenian gang, which is huge, historic and what happened was these gangsters and listed hospital workers and doctors who are on staff to provide identities of patients and they
go through a fake clinic to go through medicare, what does this mean for health reform? we have a brand-new entitlement system in place. >> on one level we have such a massive iraq as the calendar will always be some level of fraud. the trouble is the russians are very good at creating a network for people, i know exactly how far they can take it. this is a problem, they are greedy but they know not to be too greedy, usually. stuart: the fraud is 60 to 90 billion per year, could you have a guess at how much of that goes to the russian mob? >> it seems to be the russian mob is seven times more likely than any other kind of gang, so given that amount of fraud, it amounts to 13 aircraft carriers for the u.s. navy every year. maybe the russian mob accounts for three of them.
stuart: really? not much? do you feel safe saying this? >> they want a low, low profile so last you want to do is raise attention. stuart: and you are giving them a high profile. professor of nyu, expert on the russian mob. thank you for joining us, hope you come back. all right, i didn't like the commercials during the super bowl. out of touch, offputting, overly sexual. that is my opinion. a top ad executive responds to ads like this. >> there are two sides of godaddy. the sexy side and the smart side. represented by walter. together they are perfect. ♪
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and allergic reactions have occurred. before starting enbrel, your doctor should test you for tuberculosis and discuss whether you've been to a region where certain fungal infections are common. you should not start enbrel if you have an infection like the flu. tell your doctor if you're prone to infections, have cuts or sores, have had hepatitis b, have been treated for heart failure, or if you have symptoms such as persistent fever, bruising, bleeding, or paleness. if you've had enough, ask your dermatologist about enbrel. stuart: manufacture of the apple products has some big changes coming to the factories in china at apple's request. fox raising union participation. no real response to apple. blackberry released their new phone, blackberry 10. the stock is indeed outperforming up 10%.
the ratings are in for last night's super bowl. it could have been the 49ers playing against the ravens, desperately trying to reunion the commercials, but whatever it was, super bowl xlvii posted the highest ratings. we will talk about the ads from last night's game. we will get an ad executive take on the display of commercials next. at a dry cleaner, we replaced people with a machine. what? customers didn't like it. so why do banks do it? hello? hello?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello? ally bank. your money needs an ally.
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stuart: accompanist manages the electrics at the new orleans superdome has an exhibition for the short out. in the second half, a piece of equipment designed to monitor electrical load sensed an abnormality in the system, that is their formal explanation. any reaction to the stock? take a look at shares as of right now, they're trading down $0.38. that is not much of a reaction, have to say. a 34 minute blackout, the stock is down .5%. i'm not impressed by the ads in the super bowl last night. i would call some of them senseless. let's see what somebody else thinks. peter, and in washington anthony, the president of the pop group. anthony, i want to start with
you. you heard my opinion, that many ads were simply distasteful. turned me off. do you think i have a point or not? >> i think a few of them took a gamble and i'm not sure it actually paid off for them. in particular that godaddy add you just showed, that was probably a gamble and unfortunately that was pretty much below the belt if you will. stuart: why do you think they did this? i thought the ads or overly sexual, not particularly funny. why did they go in that direction? >> in the past years they have had a certain brand to uphold, unfortunately this was a different take on sort of the same play. it didn't really pan out. it was a shock value they were looking at to move into sheer surprise. but i'm not sure it actually worked. stuart: i'm going to turn to peter, you followed twitter
feeds and you have an algorithm that lets you judge the emotion positive or negative in twitter feeds. is that correct? >> yes, and we were tracking godaddy last night, it was all over the place. people were either fans of the commercial or others were completely against it. godaddy came out with neutral sentiment given the volume. stuart: which commercial generated the most positive buzz on the twitter. speak it was actually the pestatio commercial with pop star singer psy. a lot of people loved it. it was by far the best. stuart: that was the best sentiment. the one we're watching right now. what was the most negative sentiment? >> cars.com ad. it made no sense.
the fourth most often used word behind super bowl, cars.com and other things is bizarre. it did not make any sense. stuart: i could not follow it. let's go back to anthony. what is the best commercial, the one that reached more viewers in the most positive way they can remember the name of the product. >> i think probably two. the budweiser clydesdale. and the dodge ram american farmer was a surprise and it was very insightful overall. put dodge on the map as a super bowl commercial. stuart: what was in those two commercials, the budweiser and bud dodge, what was in them that would appeal to you as a professional in the ad business that made the most success? >> with budweiser, the own the clydesdale. they brought it back.
people like the feel-good story. people were saying i want to give the horse a hug. just to elicit that kind of emotion and be memorable with a name of a brand, that by far is the best thing you can possibly hope for. stuart: do you think the advertisers got the money worth bearing in mind the 34 minute blackout. >> oh, absolutely. for those who put the ads online prior, they have gotten more than their money's worth. it is a great investment especially these days with the online version and especially in the social sphere. stuart: have to add this have a twitter hash tag on them. >> up from just under 20% last year. they are realizing the importance of the hash tag campaigns. 40% of people tweet while watching television. stuart: anthony, you heard that, 40%. really? >> absolutely.
the name of the game right now is to find ways to bring people to the tv, through online media, any mobile devices just to keep the conversation going as long as he possibly can. that is the goal. stuart: this is fascinating to me. thank you very much indeed for chiming in on this. we will be back to it as well. i want to bring in the call listening to the conversation, and i have a question for you, nicole. you and i joke about prices, a 16-ounce premium beer at the superdome joined them at the super bowl yesterday. nicole: you should have made me guess. $13. stuart: it was $15. how much would you pay for a hotdog at the super bowl? >nicole: $12.
stuart: no, $9. nicole: my favorite is the budweiser ad, the clydesdales. representrepresent their brand,s beautiful, love it. seeing no less than 20 times, gross. stuart: i think we have done this to death, haven't we? thank you very much, indeed. by the way, the dow down 109.5 at 13.9. that is where we are after an hour and a half worth of business. sylvester stallone has his worst box office debut in 30 years. his movie "bullet to the head" coming in sixth place. has the taste toward violent movies fundamentally shifted? that is next.
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beginning to turn lower? >> absolutely. let's look at the title, "bullet to the head." what kind of a title is that? stuart: will it make hollywood retreat a little? >> if they keep losing money on these films, they will change very quickly. i look at my son's taste, 18-year-old college freshman and he is tired of this kind of violence as well, that tells you where the trend is our going. stuart: the highlight reel is coming uper next. o make money. o make money. i love making money. i try to be smart with my investments. i also try to keep my costs down. what's your plan? ishares. low cost and tax efficient. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing.